TWU v Veolia Environmental Services Pty Ltd [2011] NSWIRComm 1039 (21 July 2011)

New South Wales Industrial Relations Commission

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TWU v Veolia Environmental Services Pty Ltd [2011] NSWIRComm 1039 (21 July 2011)

Last Updated: 28 July 2011

Industrial Relations Commission New South Wales

Case Title:	TWU v Veolia Environmental Services Pty Ltd
Medium Neutral Citation:	[2011] NSWIRComm 1039
Hearing Date(s):	2-3 June 2011
Decision Date:	21 July 2011
Jurisdiction:	Industrial Relations Commission
Before:	Macdonald C
Decision:	(1) The payment of a cartage rate by the company to front end loader vehicles, having six wheels, where the rate is less than that prescribed by the relevant industrial instrument, is invalid.
Catchwords:	DISPUTE NOTIFICATION - Section 332 of the Industrial Relations Act 1996 - waste management industry - company engages contract carriers to cart commercial waste per contract determination- contract carriers use eight wheel vehicles with front end lifting mechanism to lift and empty waste into their vehicles - company bought out competitor's operation and eventually engaged three contract carriers of former competitor - the three contract carriers own vehicles having front lift design but only as six wheel vehicles - company advised that their remuneration would be $3.80 per cubic metre of waste for their six wheel vehicles but company pays, per industrial instrument, $4.18 per cubic metre to their eight wheel front lift vehicle contract carriers - industrial instrument has no provision for front lift waste cartage rate having six wheel vehicles - union made underpayment claim for its members to be paid $4.18 and not $3.80 - HELD: payment of cartage rate less than that prescribed by contract determination is invalid - union to file section 380 application so as to have relevant orders issued via supplementary decision.
Legislation Cited:	Industrial Relations Act 1996
Cases Cited:	Cepus v Heggies Transport Pty Ltd (1994) 52 IR 123 South Eastern Sydney and Illawarra Area Health Service v Health Services Union (o/b Peisley) (2007) 165 IR 43
Texts Cited:
Category:	Principal judgment
Parties:	Transport Workers Union of New South Wales (Applicant) Veolia Environmental Services Pty Ltd (Respondent)
Representation
- Counsel:
- Solicitors:	Mr S Bull - union official (Applicant) Mr J Murphy - Barrister (Respondent) Mr T Gooch - Solicitor (Respondent)
File number(s):	IRC 1299 of 2010
Publication Restriction:

DECISION

1. This decision concerns a dispute notification lodged by the Transport Workers Union of New South Wales (the union), pursuant to section 332 of the Industrial Relations Act 1996 (" the Act "), against Veolia Environmental Services Pty Ltd (the respondent/company). The dispute notification raised a number of issues but this decision concerns the company's alleged unilateral reduction of the rate paid to three contract carriers for front end loading waste removal and the company vehicle replacement policy.

2. The dispute notification was lodged on 15 November 2010 and listed several issues being in contention between the parties. The dispute was the subject of conferences before Tabbaa C of the Industrial Relations Commission of New South Wales (the Commission). Failing complete settlement of all issues, the file was programmed for a hearing. An application was made pursuant to section 173 of the Act for another member of the Commission to carry out the hearing. Prior to the hearing taking place, the file was relisted at the request of the respondent and that relisting was dealt with by Lynch, Acting Commissioner.

3. The hearing took place before myself (Macdonald C) on 2 and 3 June 2011.

4. At the hearing, the union was represented by Mr S Bull, who called the following witnesses:

Mark Upton - contract carrier

Damian Hansen - contract carrier

Mark Denny - contract carrier

5. At the hearing, the respondent was represented by Mr J Murphy, barrister who was assisted by instructing solicitor, Mr T Gooch. Mr Murphy called the following witness:

Colin O'Malley - Industrial Relations Manager

BACKGROUND

6. The dispute notification concerns the waste management industry, but in particular the business of commercial waste collection and removal. The respondent's commercial waste collection is undertaken by a combination of employees and owner drivers/contract carriers in a number of different types of vehicles. Collection vehicles include both front lift and rear lift operation. Front lift operation means the container of waste is lifted over the front of the vehicle and includes bins of 1.5, 3.0 and 4.5 cubic metres. The commercial waste lifted is both general waste and cardboard/paper and recycling commodities.

7. Relevantly, for the dispute before the Commission, the respondent's contract carriers, who operate front lift waste removal vehicles, utilise vehicles having eight (8) wheels and are presently paid a rate of $4.18 per cubic metre of waste removed.

8. The industrial instrument that sets the appropriate rates for waste removal by different types of vehicles, is the Veolia Environmental Services Pty Limited New South Wales Carrier's Agreement 2009 ("the 2009 Agreement"), being an agreement negotiated with the union and made pursuant to section 323 of the Act .

9. Around January 2010, the respondent purchased the New South Wales business of a competitor called WasteCorp Pty Limited ("Wanless").

10. Pursuant to the terms of that purchase, a number of carriers previously providing services to Wanless, were offered and accepted work contracting to the respondent. Given uncertainty about the volume of work that would be available to these Wanless contract carriers, the respondent engaged several of these contract carriers to carry out work for the respondent but to be still paid by Wanless - effectively a form of sub-contracting.

11. There were three such contract carriers operating under that arrangement: Takhar Transport Pty Limited; GC & DM Hansen Holdings and Mark Upton Transport Pty Limited. The owners of the latter two business are members of the union. Each of these three Wanless contractors use six (6) wheel front lift trucks for general waste collection and not 8 wheel front lift trucks as used by the carriers engaged by the respondent for general waste removal.

12. On 16 August 2010, Mr O'Malley, Industrial Relations Manager with the respondent met the three named contract carriers and made offers for them to be carriers for the respondent and not Wanless, who were paying the carriers $3.25 per cubic metre of waste collected with additional rates for specific types of work: for example, tipping at Clyde attracted $100 a load. A copy of the 2009 Agreement and a form of letter agreement were provided to the three carriers. The carriers were offered a rate of $3.80 per cubic metre in lieu of the Wanless rate arrangement.

13. Mr O'Malley emailed a union official (Darren Wait) on 17 August advising of the $3.80 arrangement and that it would be unfair to pay these three carriers the then $4.10 (now $4.18) rate paid to carriers driving eight wheel vehicles. As well, the carriers had been informed of the need to upgrade to an 8 wheel vehicle when it was time to do so. (The respondent can ask a carrier to replace an existing vehicle with a new vehicle when the existing vehicle is six years old).

14. Mr O'Malley deposed that shortly after the 16 August meeting, a Pablo Gonzalez, Front Lift/Rear Lift Manager (who was at the meeting of 16 August) was advised by Mark Upton (one of the three carriers) that he was not happy with the $3.80 rate. This information was passed onto Mr O'Malley.

15. Subsequent to that 16 August meeting, the respondent received back one of the form of letter agreement, being from Takhar Transport Pty Limited. (Ex 11, TAB 7) That carrier commenced as a respondent contract carrier on 6 September 2010.

16. The other two carriers did not provide a form of letter agreement and commenced as carriers with the respondent on 20 September 2010.

17. The respondent became aware of an issue with the $3.80 rate via the dispute notification of 15 November 2010. Only two of the three carriers were/are members of the union: Mark Upton and Damian Hansen. The dispute notification stated that the $3.80 rate was a unilateral reduction by the respondent from the applicable carrier rate of $4.18 payable to the other front end loader carriers.

18. The union's position before the Commission was that its two members were being underpaid and sought a small claims order in respect of those underpayments. The company's position was that there was no rate in the 2009 Agreement for a six wheel front end loader - only for an eight wheel front end loader. The appropriate rate for a six wheeler carrier was $3.80. This is an interim rate and when the three ex-Wanless carriers update their vehicles to an eight wheel front end loader, then they will be paid the eight wheeler rate.

FINAL SUBMISSIONS

19. Mr Bull, for the union, put the following in final submissions.

(a) The union has made an underpayment claim on behalf of its two members who operate businesses as carriers: GC & DM Hansen Holdings and Mark Upton Transport Pty Limited.

(b) The underpayment claims arise from the operation of the 2009 Agreement which applied to the two above named businesses when the company engaged the services of those two carriers.

(c) The underpayment claim operates from the first full week ending 26 September 2010, being the time when the two carriers began invoicing the company, instead of the previous principal contractor.

(d) The underpayment is based on the front end loader rate found in the 2009 Agreement. The attempt by the company to pay a lesser rate under the 2009 Agreement is a unilateral variation of the 2009 Agreement and is not a valid variation.

(e) The company's argument to justify the lesser rate the company sought to apply, was a specious argument. There is no rate for a six wheel front end waste loader in the 2009 Agreement and therefore a lesser rate could not be applied to the two carriers. The company's claim of a cost base analysis for justifying a lesser rate for a six-wheel vehicle was lacking in merit.

(f) The other issue in dispute turned on the clause going to replacement of vehicles. The company is mandating that drivers must, when required, replace their vehicles with a Volvo vehicle of certain specifications. The issue is that the drivers no longer have choice as to vehicle replacement. There needs to be consultation between the drivers and the company about the type of vehicle replacement.

20. Mr Murphy, barrister for the company, put the following in final submissions:

(a) As to the replacement vehicle issue, there is only one driver who has raised a concern: Mr Denny. His truck is around twenty-two(22) years old and he was only recently given a direction to update his vehicle. The company has given him leeway. In any event, the company is entitled to exercise its right under the 2009 Agreement to have Mr Denny replace his vehicle and do so in a way that meets the technical specifications set down by the company (per clause 7.1 of the 2009 Agreement).

(b) The union has not presented the type of order of relief it seeks from the Commission and even if the union did so, there may well be jurisdictional arguments about the capacity of the Commission to make an order of that sort.

(c) As to the dispute about alleged underpayment of the appropriate rate of pay for a six wheel vehicle, this was rejected for the grounds set out below.

(d) The 2009 Agreement was negotiated around a rate applicable to eight wheel vehicles performing front lift waste disposal. There was no contemplation that there would be six wheel vehicles performing front lift waste disposal where the 2009 Agreement was negotiated.

(e) The company moved its operations out of Enfield to Arndell Park. Later the company acquired the Wanless operation and eventually took on three Wanless operators having six wheel vehicles.

(f) The rate struck by the company for the six wheel vehicles was based on the rate for eight wheel vehicles. The rate struck comprised components for capital cost, ongoing cost and labour cost.

(g) The capital cost for an eight wheel vehicle is greater than a six wheel vehicle. Other costs, such as maintenance and running, are significantly less for a six wheeler than an eight wheel vehicle. The rate struck for the six wheel vehicle took into account these lesser monetary costs: hence $3.80 per cubic metre for the six wheeler as against $4.06 per cubic metre (as it then was) for the eight wheeler.

(h) The $3.80 struck by the company was in lieu of $3.25 plus tip rates paid by Wanless. When the ex-Wanless drivers update their vehicles to eight wheelers, then they would be paid the eight wheeler rate.

(i) The rate struck by the company was put to the three six wheeler drivers when offered engagement as carriers with the company. The three drivers expressed no opposition to the $3.80 rate. The union, on behalf of two of the drivers, lodged a dispute notification claiming underpayment of the two drivers. The union only raised an issue about this $3.80 rate after the drivers had been engaged ("on the books") by the company. This was a case of "gotcha" tactic by the union against the company.

(j) The Commission was taken to case law in support of the submission that the Commissioner should look at the intention of the parties when making the 2009 Agreement rather than the black and white term in that 2009 Agreement which lays down a one only rate for front end waste loading (with no reference to the number of wheels): Cepus v Heggies Transport Pty Ltd (1994) 52 IR 123 ("Cepus") and South Eastern Sydney and Illawarra Area Health Service v Health Services Union (o/b Peisley) (2007) 165 IR 43 ("SESIAHS").

CONSIDERATION

21. The union filed a section 332 dispute notification which raised a number of issues. This decision concerns two issues: alleged unilateral reduction by the company of the rate paid to two of the three contract carriers and the company's vehicle replacement policy.

Alleged Reduction of Cartage Rate

22. The company is involved in the waste management industry but in particular the business of commercial waste collection and removal. The company engages employee truck drivers and owner drivers (contract carriers) for that purpose. The trucks engaged for waste removal are of two types: front lift waste removal and rear lift waste removal. This dispute notification concerns certain contract carriers engaged in front lift waste removal, where waste (contained in bins) is lifted by a mechanism attached to the truck, over the front of the vehicle for emptying into the vehicle.

23. The 2009 Agreement is the applicable industrial instrument. (Ex 4)

24. The dispute arose out of a business takeover of a waste management competitor, being Wanless. After a period of time, the company decided to make offers of engagement to three Wanless contractors. These offers were made at a meeting of 16 August 2010. The company offered a cartage rate of $3.80 to these three carriers because their vehicles are six wheel vehicles. The cartage rate paid to the existing carriers (front end loaders) was, at the time, $4.08 and their vehicles are eight wheel vehicles.

25. The three Wanless carriers became carriers of the company and paid at the $3.80 per cubic metre of waste removal rate.

26. Two of the carriers are members of the union which lodged the dispute notification in November 2010, alleging, relevantly, that the $3.80 was not the correct cartage rate but $4.18 (as now applies).

27. The union's argument is based on the 2009 Agreement which has a cartage rate for front end loader vehicles. (Ex 4, Schedule A, Enfield Front Lift, Waste Type - General Waste) Prima facie, the Commission finds that the union's claim that its two members are being incorrectly paid as to their cartage rate, has merit.

28. The company put forward its case against the union's underpayment claim, based on the facts and the law. The Commission notes that the company's case is against the background that the 2009 Agreement does not provide for differing cartage rates, for front end loaders, based on the number of wheels on a truck for the type of waste collection under consideration. Sometime during this dispute, the company lodged an application to vary the 2009 Agreement, in order to have a different cartage rate for six wheel vehicles. That application was subsequently withdrawn given that the variation application to an agreement could only be successful if the union consented to the application. The union did not consent.

29. One company argument is that the ex Wanless carriers agreed to be engaged at the $3.80 rate. This argument however is not a valid argument. The company and a carrier(s) can not agree to a rate that is less than that provided by law and in this instance that is the rate set out in the 2009 Agreement.

30. The company also submitted that the $3.80 cartage rate was comparable to the rate being paid to the carriers by their former principal contractor (Wanless), which paid the carriers per a different cartage formula. Even if this argument had merit, the fact remains that the $3.80 cartage rate offered to the three carriers, is below the rate prescribed in the 2009 Agreement.

31. There was a submission put that payment of the now $4.18 per cubic metre of waste removal rate would represent a windfall profit to the six wheeler carriers. This argument was based on the costs associated with a six wheel vehicle as against an eight wheel vehicle. That is, a six wheel truck costs less money to purchase, has less running costs, labour costs and maintenance costs, than an eight wheel vehicle. It may be the case that the company decided to strike a six wheel cartage rate that had as its basis, an equitable standing, but the 2009 Agreement does not prescribe cartage rates based on costs comparisons between six and eight wheel vehicles. There is but one relevant cartage rate prescribed.

32. The company also relied upon case law in support of its defence against the union's underpayment claim.

33. The Cepus case concerned an underpayment claim by a carrier for carriage of certain material. The rate paid to the carrier arose out of negotiations between the carrier and the principal contractor, without express reference to an industrial instrument. Their negotiated terms were in place from 1986 until 1992. Then the carrier claimed he should have been remunerated for his carriage work pursuant to a certain contract determination which provided a higher carriage rate than the negotiated terms. The principal contactor argued that the contract determination did not apply to the carrier in question.

34. Mr Murphy referred to a passage in the Cepus case which set out the principles on award interpretation where there is ambiguity as to meaning of phrases in awards and contract determinations. (52 IR 123 at 127-128)

Mr Murphy cited in particular principles (v) and (vi) and submitted that the intentions of the parties when negotiating the 2009 Agreement, did not take into consideration that the 2009 Agreement front end lifting cartage rate would apply to a six wheel vehicle.

35. The Commission finds that it is not assisted in its deliberation by this case authority which has relevance only when there is ambiguity and an interpretation is required to clarify that ambiguity. In this case, there is no ambiguity involved. The 2009 Agreement states that a certain rate is payable for a front end waste loader vehicle. No interpretation principles are required because the language is plain on its face. The situation would be different if the 2009 Agreement specified that the cartage rate was for an eight wheel vehicle - but it does not.

36. The other case cited by Mr Murphy (the SESIAHS case) applied the approach taken in the Cepus case. The SESIAHS case involved a claim by a union for an allowance (ancillary fire safety duties) for a member. The allowance was contained in an award but the award was silent as to what duties needed to be performed in order to attract payment of the allowance. The Full Bench applied the principles of interpretation because of a lack of definition in the award as to what constituted the duties that would attract payment of the allowance and the consequent ambiguity as to whether the duties actually performed by the employee in question might be the same duties as that comprehended by the allowance in question.

37. The Commission finds that it is not assisted by this case authority for the same reason as set out above for the Cepus case. That is, the principles of interpretation have effect when there is an ambiguity to be resolved and there is none here on the facts before this Commission because the 2009 Agreement is clear in its language.

Replacement Vehicle

38. The other issue put before the Commission concerned the application of the company's replacement vehicle term contained in the 2009 Agreement: see clause 7. Vehicle. The union relied upon the evidence of a carrier (Mr Mark Denny) to claim that the company is mandating that carriers replace their "old" vehicles with a certain brand type of vehicle (Volvo). The union sought greater consultation between the carrier and the company as to the type of replacement vehicle.

39. Mr Murphy, in final submissions, queried what relief was being sought by the union. No order had been put to the Commission for its consideration.

40. Mr Murphy pointed out that the only evidence of concern is that raised by Mr Denny as to the replacement vehicle policy. Seven other owner/drivers have upgraded their trucks without complaint. Mr Denny, it was said, has been given an extreme amount of leeway as to replacement of his vehicle by the company. Clause 7.3 specifies that the company can give three months notice to replace a vehicle that is older than six (6) years. Mr Denny's vehicle is some twenty-two (22) years old and he was only directed last year to replace his vehicle.

41. Absent an order being put to the Commission for relief, the Commission can not take this issue any further but notes that clause 7.2 stipulates that there is to be "proper consultation" between the carrier and the company before a replacement vehicle is purchased.

CONCLUSION

42. There were two issues for the Commission's consideration arising out of the union's section 332 dispute notification.

43. One issue concerned a claim for underpayment of remuneration. This claim was based on the cartage rate specified in the 2009 Agreement for front end loader vehicles. The rate currently being paid to the ex-Wanless drivers is $3.80 per cubic metre of waste collected. The union claimed that the correct cartage rate is $4.18 as specified by the 2009 Agreement.

44. Having considered all of the evidence, the Commission concurs with the union's claim and finds that the correct cartage rate applicable to the ex-Wanless carriers is $4.18. Mr Murphy for the company requested that, if the Commission found favour with the union's claim, no order(s) be made until the company had had the opportunity to check the correctness of the amounts of remuneration claimed. The Commission agrees to that request. The parties are to advise the Commission of agreed amounts of underpayment of remuneration in respect of the two carriers: Mark Upton and Damian Hansen. Upon receipt of that information, the Commission will issue a supplementary decision containing the appropriate orders. The Commission notes that it does not have a section 380 small claim application before it.

45. The other issue concerned the replacement of "old" vehicles per clause 7 of the 2009 Agreement. No order was put by the union to the Commission by way of relief sought. The Commission again notes that clause 7.2 requires "proper consultation" between the carrier and the company before a vehicle is replaced.

A Macdonald

Commissioner